18 Apr When will my FDIC protection run out?

Q. I am in my 90s and decided to leave my grandchildren something to remember me by. I have eight grandchildren with revocable, in-trust-for (ITF) accounts for each. I also have my own savings and checking account at the same bank. Does having it all at one bank limit my FDIC coverage, or do I have to move to different banks to get full protection?
— Grandparent

A. Setting aside funds for your grandchildren’s benefit is a very thoughtful gesture on your part, and you’re smart to want to be sure the funds are protected.

That’s where the Federal Deposit Insurance Company (FDIC) comes in. It’s an independent agency of the U.S. government that provides a safety net to protect consumers against the loss of their deposits if an FDIC-insured bank or savings association fails.

The FDIC’s standard deposit insurance amount is $250,000 per depositor and per FDIC-insured bank, said Jodi Cirignano, a certified financial planner and certified public accountant with Lassus Wherley in New Providence.

But, she said, a depositor may qualify for more than $250,000 of FDIC coverage if he or she owns accounts in different ownership categories at the same bank.

“The $250,000 of coverage applies to each of the ITF accounts established for your grandchildren,” Cirignano said. “By virtue of identifying a different account beneficiary, each ITF has a unique ownership structure and qualifies for FDIC coverage on a standalone basis.”

As for your individually-owned checking and savings accounts, they, too, represent a separate ownership category, and combined, these deposits are insured for up to $250,000, she said.

In total, you have up to $2,250 million of FDIC insurance covering your eight ITF and personal bank accounts, she said.

“You can feel good about your thoughtful gift and enjoy the peace of mind of knowing your deposits are secure,” Cirignano said.

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This post was initially published in April 2017.